To avoid any setbacks on the road to your dream pad, here’s what you need to know about the extra costs involved in buying a new home.
Costs differ across each state and territory. Based on a property worth $600,000, stamp duty for first home buyers in Victoria would cost $15,535, in New South Wales $12,370 and in Queensland $12,850. To check how much your stamp duty bill is, use the online calculators listed at MoneySmart.
Whatever your applicable rate, chances are stamp duty will be the largest upfront fee you’ll pay. However, if you are a first homebuyer you may be eligible for concessions in your home state or territory.
Stamp duty is due within 30 days of the property settlement. A word to the wise – don’t start saving on the day you settle. The earlier you start saving to cover this cost, the better.
Dotting the legal i’s and t’s all begins with a conveyancer. Among other things, a conveyancer will transfer the legal ownership of the property and check the contract of sale.
Conveyancing costs start at about $1000, but can vary widely depending on the individual you engage and the amount of work involved in the property settlement. There are DIY kits, but without any legal expertise you may find them tricky to navigate.
Before you hire a conveyancer, make sure to ask what they charge and make sure there aren’t any hidden costs you need to know about.
Pest and building inspections costs
A combined pest or building inspection costs about $500, but differ according to the property size. If you’re buying a second-hand property, it could be the best money you spend. Building inspectors will search for any structural problems or defects, while pest inspectors will look for signs of infestation.
Mortgage registration is a State Government fee to register a home. Just like stamp duty, it varies in each state and territory and is based on the property value. Thankfully, it doesn’t cost nearly as much as stamp duty. On a $600,000 house, expect to pay $127 in Tasmania, $152 in South Australia and $160 in Western Australia.
You are responsible for paying council rates from the day of settlement. Again, these rates vary depending on which municipality your new property belongs to.
Lenders mortgage insurance is payable if you borrow more than 80 per cent of the value of the property.
Start saving your pennies by choosing a bank that doesn’t sting you for the basics. The ME Basic Home Loan and ME Flexible Home Loan have no application or account-keeping fees. And if you opt to pay $395 annually for the Member Package as part of the Flexible Home Loan, you won’t have to pay the $150 solicitor fee, $200 valuation fee and $150 fixed or split loan variation fee.
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